FEES IN FAMILY LAW CASES
Flat Fee Contracts versus “Retainer Fees”
In virtually all Family Law matters Woody Nesbitt handles, a “flat fee” contract is used.
Because of multiple components, it is common for “additional flat fees” or “asterisk fees”, “*”, to be set forth in your contract. The specific components covered by the basic flat fee are specifically and clearly identified.
If certain components become contested, or, if other issues or claims are asserted and/or become contested, the additional flat fees or flat fee ranges for such are clearly identified and specifically set forth.
The economic reality of family law litigation must be dealt with. You are not an insurance company, giant corporation or the U.S. Mint. You need to know what your financial undertaking is, and the risks and costs of “what may happen”, clearly, in a contract, “up front”.
Only you or the other litigant can make an issue “contested”. Woody seeks to give you the financial reality of litigation to help you make your decisions, knowing the financial costs associated with “litigating” versus either creating, negotiating, accepting or rejecting a consent/agreed resolution to one or more of the identified components of your case. You know the costs “to litigate” whether by your own choice, or, being “dragged into” litigation due to an agreed resolution being impossible.
And remember, as a mediator, Woody seeks to resolve disputes. As your attorney, he does the same. His goal, is to get you good results, without the horrid experience and often crushing costs, financial, emotional and spiritual, of litigation. With flat fees, you know the cost to litigate.
Flat fees are paid in full, “up front”, along with a deposit for court costs and client expenses all clearly identified and detailed in your written contract of representation. A flat fee is essentially a discounted “retainer fee” to handle specifically identified issues. You’ll understand better after reading “flat fees versus retainer fees”, below, where these two different ways of paying for a lawyer in a family law case are compared. Contingent additional flat fees are due if/when a clearly identified component/issue becomes contested. “Contested” is clearly identified in your contract. Either you, or, the other side, makes an issue “contested”. Not your lawyer.
In some cases, a flat fee is paid for identified matters covered by the basic flat fee and a “pay plan” is formulated for any additional or contingent flat fees that may come due if identified issues become contested. Each case, each client and situation is different.
You pay for copies what Woody pays for copies. Nothing more. Client costs must be kept current, with an identified minimum balance in your account at all times. Unused costs deposits are returned to you at the conclusion of your case. They are not a fee.
In rare instances, due to the unique factors present, a “costs inclusive” flat fee contract may be entered into. A flat fee is paid, the costs are paid from that fee, the attorney receives as their fee what is left after the costs are paid.
Flat fee contracts include any paralegal expenses Woody may incur. Woody and his chief paralegal have been “a team” for nearly 15 years. On rare occasion, you may speak to her, or, she may call you.
How Do “Flat Fees” Work, Why Not A “Retainer”?
With a “retainer fee”, the client advances a sum of money to the attorney who “draws” from the “retainer” as the attorney spends time on your case. The more time spent, the more the “draw”.
If your “retainer” is used up, you guessed it, you must “put down” more money. Most attorneys charge in minimum 1/10th of an hour increments at rates from $200 – $400 per hour. This does not mean that if the attorney does not spend at least 6 minutes on your case there is no charge. It means if they spend any time on your case that is less than 6 minutes, it is billed as 1/10th of an hour x their “hourly rate”.
You usually also are charged for talking to the attorney’s “paralegal” or other assistant at rates many times more than what the attorney is paying that person for their time. You get charged for letters from your attorney to you, about any aspect of your case, including asking that you call and make an appointment to “discuss issues”. (Woody calls you on the phone. Done!)
You get charged for “attorney time” if the “paralegal” you pay to talk to then asks the attorney questions you may have. You get charged, literally by the second, for any conversation you have with your attorney…face to face, by phone, or e mail, and usually, in increments of not less than 1/10th of an hour.
At $300 per hour, a 30 second phone call can be billed at the “minimum billing increment”, i.e., $30 = 1/10th of an hour. Every increment of time, no matter how small, is billed against your “retainer”. You usually get a monthly statement showing how much is left on your retainer, and the “draws” made from it for this and that, and, the increments of time charged for each.
Attorneys who draw from retainers spend a significant amount of time filling out “time slips”. Some say, nearly 1/5th to 1/4th of their time. And some charge you for the time to create your time slip and the time for them to review your monthly statement! This is simply the way “practicing law” has traditionally been done.
Remember, the “time slip” is a record of every second spent on each case, each thought, each phone call, hour by hour, each day on every single case the attorney may have any dealings with that day.
Time slips are then given to an employee, usually a full time employee that you help pay for, who must enter each individual time slip into a computer program, on each case, daily, or weekly. Draws from each retainer are made, usually at the attorney’s discretion…you get a statement after the fact.
How Do “Flat Fees” Work For Your Lawyer?
Woody Nesbitt has handled thousands of family law cases. He assesses and analyzes each case, and due to his experience, he generally forms a “best case”, “worst case” scenario and prices your basic flat fee in the middle.
Some cases take more time, some less, than initially anticipated. For Woody, it all works out, balances out, and he is at all times trying to get your case resolved as rapidly as possible, and, without litigation if at all possible.
And remember, if you choose to litigate, or, are “dragged into” litigation, your flat fee contract tells you what it will cost for that litigation, usually issue by issue. This helps you plan your finances, present and future. This helps you make a decision to litigate, or, to put another proposal of settlement on the table, or, to accept or reject the opposition’s proposal of settlement.
Also contributing to the efficiencies of flat fees is the fact that Woody doesn’t waste time on “time slips”, doesn’t have a time slip processor employee expense, computer, billing program and statement expenses, CPA audit expenses of the retainer fee draws, etc.
You pay a flat fee for Woody to try his best to keep you out of litigation. The final decision is always yours. Issues that may be covered by the basic flat fee even if litigated are clearly set forth in your contract. All issues that are covered by your flat fee if resolved by agreement are listed, and, contingent/additional flat fees, per issue, are clearly set forth in your contract. You make the final decision if the cost vs. risk vs. gain, of litigating rather than reaching a consent agreement, is worth it.
FEES FOR INJURY & DEATH CLAIMS
All of Woody Nesbitt’s clients have written contracts. In injury & death claims, virtually all are “contingent fee” contracts. The lawyer gets a percentage of your gross recovery as their fee.
If nothing is collected, the lawyer has no fee.
Minimum fees range from 25% to 33 1/3% of the gross recovery. These fees apply if a case is settled without a lawsuit being filed. If a lawsuit must be filed, that is, the case cannot be settled by agreement after the case is “worked up” and presented for settlement discussions, a higher percentage fee then applies. This is usually from 33 1/3% to 40%, depending on the nature of the claim and other considerations unique to each case.
If a case is resolved after preparation for a mediation, or, after/during mediation, or, after preparation for, or, during or after a trial, a higher fee is set forth in the contract. Each case is different, but this fee is usually 35% to 40%.
Costs In Injury & Death Claims
THE LAW REQUIRES that the client always be responsible for the payment of their costs of litigation (copies, photos, investigators, etc.). It is unethical for an attorney to promise to pay for the client’s costs.
In all cases, it is economically beneficial for the client to pay for their costs as they occur. This is done by a deposit into a client trust or client cost account from which the client’s costs are paid. From time to time in some cases, additional cost deposits are needed.
When a client advances their costs, when the case is resolved, “off the top”, the costs paid by the client are deducted and reimbursed to the client before the lawyer’s percentage of the proceeds is deducted.
If a client lacks the financial ability to pay for their costs, any costs paid/advanced by their lawyer are deducted from the client’s portion of the proceeds after the case is resolved. The lawyer is paid “off the top”, from the gross proceeds.
A lawyer may accept a case with the understanding “up front” the client does not have the financial ability to pay their costs as they occur. Whether the client can reimburse the lawyer for costs advanced by the lawyer, should the case not be successful, that is, not result in a financial recovery, is a risk-decision the lawyer must make before or after agreeing to represent the client.
In some matters, only after time and costs are spent pursuing or investigating a case, it is determined that the case has no merit, or, that no financial recovery is possible.
In all cases, the client remains responsible for the costs of exploring, investigating, filing and/or pursuing their injury/death claim. Whether costs advanced by the lawyer are ever recovered from the client who is economically no able to pay those costs is simply a business risk undertaken by the attorney.
FEES IN CRIMINAL CASES
Again, Woody Nesbitt uses a written contract for any and all cases he handles. Fees in criminal cases are usually paid in full, up front, but with contingent additional fees being identified and set in the event certain “steps” in the criminal prosecution occur.
In some rare instances, a partial fee is paid, and, a “pay plan” is developed and set forth in the contract.
For reasons that are discussed with each client, there are variables, unknowns, risks and possible developments unique to each case that cause fee agreements in criminal cases to be different than those in family law or injury cases.
The client always remains responsible to pay for the costs associated with their case, as may be identified in their written contract.